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Head or Heart: Paying More Can Reduce Employee Turnover, but Will It Boost Revenue?

In this new column by Dog Krazy’s Chris and Nancy Guinn, the partners in business and life share how they manage challenges at their stores with vastly different styles.




WORKING WITH YOUR spouse isn’t easy. But it’s also a dream come true when you love the one you’re with in business. Chris and I couldn’t be more different. He thinks with his head, and I think with my heart. While we disagree on so many things, the combination of our management styles leads to a successful business with the perfect balance of smarts and soul.

The Problem

HEART — NANCY: Our employees are the backbone of Dog Krazy. Without them, it would be Chris and I trying to do everything ourselves at seven stores.

Impossible. I love each and every one of our crew, and while I understand we cannot afford to pay everyone a six-figure salary, I do want to give our employees as much as we are financially able to.

For years, I have pushed for a higher hourly rate for our sales associates. Chris always pushes back. Twice we compromised and employed fewer people at higher pay, but we ended up hiring more employees to keep up with each store’s daily needs.


I feel that if we pay a higher hourly rate, we can take our time finding the right people, those who can handle the workload and succeed. The stores will have less turnover than with the employees we attract with lower pay. Our managers will spend less time training new employees and more time training those who do want to be with us because we pay a higher-than-average wage, offer a range of benefits and regularly show our team members how much we appreciate them.

HEAD — CHRIS: With the pandemic came increased revenue and new customers for Dog Krazy, but it also brought with it business costs that continue to rise, as well as The Great Resignation and quiet quitting. We now live in a world where a person fresh out of high school with no discernible skills thinks they should earn enough to live on their own, drive a nice car, and be afforded a lifestyle that someone with 10-plus years in the workforce has earned.

So to Nancy’s most recent push, in July 2022, to pay sales associates more, I responded that we already pay them $1 or $2 above minimum wage. They get $6,000 in health, dental and vision benefits, half of which we subsidize, plus PTO and life insurance. Employees also receive generous store discounts that add an additional $2,000 to $3,000 a year. But because these benefits are not reflected in their net pay, many don’t see them as additional compensation. Oh, and we have had a bonus program in place since 2015 that allows them to earn more than $500 more per month.

But I digress — the numbers have spoken. It costs $4,000 to $5,000 to recruit, hire and train a new sales associate. Our turnover rate averaged at the time almost 20% a month. We were spinning our wheels on new-hire training, and employees were leaving before we could train them to the point where we reaped any benefits from a sales standpoint.

The Decision

HEART — NANCY: This time, we strategically waited until the turnover resulted in a bare-minimum crew who we trusted and have been with us for some time. Then we gave everyone raises and restructured our pay to higher wages, with requirements tied to KPI report cards. Bonuses are still available based on their performance, and we increased our starting hourly pay to attract more quality employees. We are operating with fewer people, but everyone has been keeping the stores running efficiently and effectively.


HEAD — CHRIS: So Nancy won, and we now pay our associates $4 to $6 above minimum wage. For us that equates to $14 to $16 per hour before any bonuses.

The Results

HEART — NANCY: Our turnover rate has dropped significantly. More employees are signing up for insurance, and morale in every location has improved tenfold.

HEAD — CHRIS: Has the pay bump helped? Yes and no. Our turnover rate now averages 3%, well below the current national average of 21% for retail associates. However, we haven’t yet seen a correlating increase in revenue, partly due to sales associate “seasoning.” This could also be a sign of the current times in that what goes up, must come down. The economy has been teetering on the brink of a recession. I guess only time will tell as to which was right! My head or Nancy’s heart.



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